U.S. Agency for International Development - USAID

DEFINITION of U.S. Agency for International Development - USAID

The U.S. Agency for International Development is an independent federal agency that provides civilian aid to foreign countries.

BREAKING DOWN U.S. Agency for International Development - USAID

President John F. Kennedy created USAID in 1961 by executive order. The agency is tasked with administering the federal government's foreign civilian aid programs, which include disaster relief, technical assistance, poverty alleviation and economic development. While USAID is independent, it falls under the guidance of the Secretary of State. According to the Committee for a Responsible Federal Budget, foreign aid makes up around 1% of the federal budget, or 0.7% if military aid is excluded.

History of USAID

U.S. civilian assistance to foreign nations began in the 19th century with informal "technical missions," in which experts – often with government assistance – traveled to Asia and Latin America to spread knowledge of industrial techniques, economic policy, sanitation and other fields. In 1919, Congress formed the American Relief Administration to provide humanitarian assistance to post-war Europe. Later interwar government aid efforts focused on Latin America.

Following World War II, the Marshall Plan saw the U.S. spend over $13 billion – $140 billion in 2017 – to rebuild war-ravaged European economies. The Cold War led to competition between the Soviet Union and the U.S. to win the favor of "third-world" countries (that is, outside the first-world West or second-world communist bloc). While much of this effort was focused on military aid, civilian assistance also played a part. It was in this context that Kennedy ordered the State Department to create and independent agency to coordinate civilian foreign aid.

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The Treasury secretary is the head of the U.S. Department of the Treasury; the position is one of the most important in the executive branch and is analogous to that of finance minister in other countries.